Rahul Gandhi's single-slab GST idea flawed: Jaitley
New Delhi, July 1: Union Minister Arun Jaitley on Sunday attacked Congress President Rahul Gandhi's idea of a single slab GST for India, terming it flawed.
He added while there would be scope to merge some of the mid-category tax slabs depending on the collections going up, but a single-slab system will not work for India.
"Rahul Gandhi has been advocating a single slab GST for India. It is a flawed idea. A single slab GST can function only in those countries where the entire population has a similar and a higher level of paying capacity," Jaitley wrote in a Facebook post on completion of one year of the Goods and Services Tax (GST).
"Being fascinated by the Singapore model is understandable but the population profile of a state like Singapore and India is very different," he said adding that while Singapore can charge 7 per cent GST on food and on luxury goods, that model won't work here.
"Since GST is a regressive tax, the poor have to be given a substantial relief. Thus most food items - agricultural products and the aam aadmi (common man) used products have to be tax exempt. Some others have to be taxed at a nominal rate. The others could be taxed higher.
"Eventually, as the collections improve, many more items from the 28 per cent category can possibly come down. Only sin products and luxury goods can remain there," he said.
Jaitley also slammed Gandhi and former Finance Minister P. Chidambaram on their demand to bring petroleum products under GST, saying the Congress Finance Ministers in the states were not ready for it.
He said it was the current government which worked out a formula to ensure that "petroleum products would be included in the Constitution amendment providing for the GST but the council can decide the date from which to bring them into GST".
"The UPA kept petroleum products permanently outside GST. On the contrary, we brought them back into the Constitution as levyable to GST and can gradually impose the GST when the GST Council so decides.
"For this I would continue to make my earnest efforts and hopefully when the states are more comfortable with the revenue position, it would be an ideal time to strike for a consensus between them," he said.
Jaitley, who is listed as a minister without portfolio in the Prime Minister's website, also attacked the Congress-led UPA Government for "losing the confidence of the states" when the previous government tried to implement GST.
"In a move towards the single tax system, the UPA asked the states to abolish the Central Sales Tax (CST). It promised the states that it would give them a compensation in lieu of the CST for a certain number of years.
"The states acted accordingly, abolished the CST and the Central government owed the states several thousand crores as CST compensation. When the states demanded CST compensation, the Centre would look the other way," he said.
Jaitley added that when he took over as the Finance Minister, he cleared all the arrears of CST in order to bridge the trust as the states had declared that they would discuss GST only if past CST compensation is paid.
"The CST compensation was paid. The states were then willing to come to the table and move further on the GST," he said.
Jaitley also said after he took over, he agreed to pay to the states, after discussing in the GST Council, a 14 per cent increase of revenue for the first five years for any loss of revenue and the states jumped for this proposal.
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India, Ethiopia elevate ties to strategic partnership as PM Modi holds talks with his counterpart
Addis Ababa (PTI): India and Ethiopia on Tuesday elevated their historical ties to a strategic partnership, as Prime Minister Narendra Modi held wide-ranging talks with his Ethiopian counterpart Abiy Ahmed Ali during which they discussed issues of bilateral and mutual interest.
Modi, who arrived here from Jordan on his maiden bilateral visit, was accorded a ceremonial welcome at the National Palace ahead of the bilateral talks, reflecting the vibrant India-Ethiopia relations rooted in shared history and a promising future.
"We are elevating India and Ethiopia relations to a strategic partnership. This step will provide new energy, new momentum and new depth to our ties," Prime Minister Modi said during the delegation-level talks.
He thanked PM Ali for his support in India's fight against terrorism. "The support of friendly countries in this struggle against terrorism holds great significance," Modi said.
"Today, we got the opportunity to deliberate on the key aspects of our cooperation, such as economy, innovation, technology, defence, health, capacity-building and multilateral cooperation. I am pleased that today, we have decided to double the student scholarship for Ethiopia in India," Modi said.
Modi said that India and Ethiopia have shared contact, dialogue, and exchange for thousands of years. The two countries, which are rich in languages and traditions, are symbols of unity in diversity, he added.
"Both countries are democratic powers committed to peace and the welfare of humanity. We are co-travellers and partners of the Global South. On international platforms, we have stood shoulder-to-shoulder," he said.
The two sides signed eight MoUs/agreements, including upgrading ties to 'Strategic Partnership', customs cooperation, establishing data center at the Ethiopian Foreign Ministry, UN Peacekeeping training cooperation, debt restructuring under G20, more ICCR scholarships and AI short courses for Ethiopians, and support for maternal and neonatal healthcare.
Modi said the African Union's headquarters in Ethiopia makes the country a meeting point of African diplomacy. "Inspired by the common vision of an inclusive world, in 2023, India ensured that the African Union became a G20 member," he said.
In 2023, during India’s G20 Presidency, the African Union was admitted as a permanent member of the G20.
Modi said that though this is his first visit, he felt a deep sense of belonging and warmth, reflecting the thousands of years of connection between the two countries.
On his part, Prime Minister Ali said the two countries share over thousands of years of connection through trade, diplomacy, education, culture and even in our food and traditions. "These ties continue to shape a deep friendship, collaboration and mutual respect between our people," he said.
"We also appreciate your consistent message that Africa's priorities must lead the partnership. These kinds of dignified, respectful messages for Africa are very important. Mr Prime Minister, keep pushing. That is the type of message we are expecting from all our trusted friends," Ali said.
He said this aligned fully with Ethiopia's development plan - African-owned, African-led, and African-defined.
"Today, we meet with a clear focus to shape a modern partnership, grounded in sovereignty, self-reliance and practical cooperation. Our cooperation is rooted in equality and South-South solidarity," he said.
"Our economy is performing strongly. Last year, we grew 9.2% and this year we are expecting 10.3% GDP growth. Besides GDP growth, our FDI inflow is also rising big time. India is the leading source for our FDI," he said.
"We have more than 615 Indian companies which are investing in Ethiopia. This all gives our cooperation a strong foundation of trust. I think our decision today that we elevate our historic relationship to a strategic relationship is the right decision," he added.
Ethiopia also conferred its highest award - The Great Honour Nishan of Ethiopia - on PM Modi. He is the first global head of state to receive this award.
Prime Minister Modi also went to the Friendship Park and Friendship Square in Addis Ababa with PM Ali.
In a warm and special gesture, PM Modi was earlier received by his Ethiopian counterpart at the airport and accorded a warm and colourful welcome.
"Ethiopia is a nation with great history and vibrant culture," Modi said.
PM Ali informed his Indian counterpart about the varieties of Ethiopian coffee during informal talks.
"At Addis Ababa airport, took part in a traditional Coffee Ceremony with Prime Minister Abiy Ahmed Ali. The ceremony beautifully highlights Ethiopia’s rich heritage," Modi said.
In a unique gesture, the Ethiopian Prime Minister drove Modi to the hotel.
On the way, he took a special initiative of taking PM Modi to the Science Museum and Friendship Park, which was not in the itinerary.
"Gratitude to Prime Minister Abiy Ahmed Ali for showing me glimpses of Ethiopian history and culture at the National Palace Museum in Addis Ababa. It was a powerful reminder of Ethiopia’s rich traditions," Modi said in a post on X.
The Nobel Peace Prize-winning Ethiopian PM’s special gestures show remarkable respect for Modi, sources said.
"Thank you Ethiopia for a welcome that was unforgettable. The Indian community showed remarkable warmth and affection. India-Ethiopia friendship is going to get even more robust in the times to come," Modi said.
When Modi arrived at the hotel, he was warmly welcomed by the members of the Indian community. Local artists performed dances. Some of them danced on the theme of the popular Hindi song 'Aisa Des Hai Mera' to welcome him.
On Wednesday, Modi will address the Joint Session of Parliament and share his thoughts on India's journey as the "Mother of Democracy" and the value that the India-Ethiopia partnership can bring to the Global South.
PM Modi arrived in Ethiopia from Jordan, where he held a one-on-one meeting with King Abdullah II at the Husseiniya Palace on Monday before the delegation-level talks.
India and Jordan also inked MoUs in the fields of culture, renewable energy, water management, digital public infrastructure and twinning arrangement between Petra and Ellora, aimed at giving a major boost to bilateral ties and friendship.
From Ethiopia, Modi will visit Oman on the final leg of this three-nation tour.
